Correlation Between Supermarket Income and CAP LEASE
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and CAP LEASE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Supermarket Income and CAP LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and CAP LEASE AVIATION, you can compare the effects of market volatilities on Supermarket Income and CAP LEASE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Supermarket Income with a short position of CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and CAP LEASE.
Diversification Opportunities for Supermarket Income and CAP LEASE
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supermarket and CAP is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION and Supermarket Income is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Supermarket Income REIT are associated (or correlated) with CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Supermarket Income i.e., Supermarket Income and CAP LEASE go up and down completely randomly.
Pair Corralation between Supermarket Income and CAP LEASE
Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 0.39 times more return on investment than CAP LEASE. However, Supermarket Income REIT is 2.53 times less risky than CAP LEASE. It trades about 0.07 of its potential returns per unit of risk. CAP LEASE AVIATION is currently generating about -0.11 per unit of risk. If you would invest 7,040 in Supermarket Income REIT on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Supermarket Income REIT or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. CAP LEASE AVIATION
Performance |
| Timeline |
| Supermarket Income REIT |
| CAP LEASE AVIATION |
Supermarket Income and CAP LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and CAP LEASE
The main advantage of trading using opposite Supermarket Income and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, CAP LEASE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CAP LEASE will offset losses from the drop in CAP LEASE's long position.| Supermarket Income vs. Infrastrutture Wireless Italiane | Supermarket Income vs. Southwest Airlines Co | Supermarket Income vs. Indutrade AB | Supermarket Income vs. Greenroc Mining PLC |
| CAP LEASE vs. Tyson Foods Cl | CAP LEASE vs. MTI Wireless Edge | CAP LEASE vs. Associated British Foods | CAP LEASE vs. Bell Food Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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